The Reserve Bank of New Zealand is expected to announce a record cut in the Official Cash Rate on Thursday.
Money markets are pricing in a cut of 1.5 percentage points in the face of a weakening outlook for the world economy, which would take the rate to 5%. It is currently 6.5%.
Economists say the Reserve Bank will need to cut the cash rate by that amount if the impact of any cut is to be felt by consumers.
They pick the OCR to bottom out at about 4% by the middle of next year, but this could change if the Reserve Bank issues a bleak outlook.
If so, Radio New Zealand's economics correspondent says it may be that deeper cuts are in prospect.
The New Zealand economy has been in recession since the start of the year and is expected to keep shrinking until at least the middle of next year.
On Tuesday, the Reserve Bank of Australia cut its benchmark interest rate by 1 percentage point to 4.25%.
It was the fourth consecutive month that the RBA has cut the OCR - which is now at its lowest level in six and a half years, and is three percentage points lower since September.
